The AEC software companies are growing really fast, like ten 50%. You know who wouldn't be envious of that? And it's a highly profitable, you know, segment of the market with all these individual like individual tools that are disparate, don't really work together. You know, who's left to do all the hard work to integrate all this stuff together? Well, it falls on, you know, the end user, right? He's got to be the one who connects all the dots. Welcome to another episode of the Next Generation Design podcast. I'm your host, Jennifer Piper.
Today we're talking about the architecture, engineering and construction industry and why tech advances there have been relatively stagnant for the past few decades. In this episode, I'm talking with Derek England, product manager at Siemens Digital Industry Software for AEC and BIM in part one of our three-part series with Derek. We're discussing trends in the AC industry, improving tech implementation, and why integration may be key to widespread adoption. Before we begin, let's meet today's guests.
Derek, welcome to the episode. Would you please introduce yourself to the audience? I'm Derek England. I'm the next product manager for AC and BIM at Siemens Digital Industries Software. I've been doing this for 25 years now and I've had the privilege of working with some of the most innovative companies in the world, understanding their workflows, helping them achieve their goals. And,
you know, my job is really to understand this and then make and suggest enhancements to our product to make it even better so that they're even more productive. Thank you, Derek, for joining today and talking to us about the challenges that are facing AEC companies as they evolve and streamline the design, engineering and construction processes. Can you give us a little bit of an overview on the topic? It's a challenge today to make sure that all these projects are done on time and on budget.
And one of the big challenges is coordinating these design activities, you know, especially between like general contractor and subcontractors and ensuring that we're all working from the same page. Right. It's particularly challenging because there's just a lot of, you know, user errors and inefficiencies and, you know, even the really innovative companies that are really pushing the envelope, trying to get best practices and best processes utilized in their company. They are unsatisfied with the current set of tools out there. It feels like these tools are disconnected and disjointed. And in trying to pull together all these disparate tools, it's a real challenge.
What key trends do you see emerging in the AEC industry? What do some of those challenges look like in a real world setting? Some of the challenges are that the construction companies that are in this, you know, the profit margins are really thin. So if you can compare it to like automotive or aerospace or machinery, you know, there are the profit margins are like on the level of like retail. So these are companies that are, you know, must be really efficient.
They don't have room to go over budget and lose, you know, on these projects. But, you know, they also experience a lot of project overruns and delays because of issues, you know, that they discover, you know, on site. But it's also really innovative industry.
Can you tell us about some of the most recent innovations you've seen in this area today? You know, there's so many new innovations and improved software and new construction technologies. I mean, they've got stuff like some of the scanning technology they've got like trying to 60 degree cameras. They've got drones that are scanning worksites, making, you know, this process of scanning just so much easier. I mean, they even have like a robotic dog that walks around scanning stuff through like hallways.
It's like right out of sci fi. It's really cool stuff. We also, like, see a lot of use of like virtual reality now to see like owner operators are able to like put on VR headsets and start basically immersing themselves in the design very early, which is great because when they're there and they can see it, you know, they can visualize it, you know, accurately. And so as things progress, they don't say, I'm surprised by this. I wish this was different. Maybe we should change this because they know, you know, very early. But the final result is and so they really this gives them a much better way to interact with the owner operator.
So in future things. Are there any real world examples that you could give us that talk about the process at work? It was really cool to have this one example where a guy sat down in like in a theater that they were designing and he said, What can what does the stage look like from this vantage point? And then he moved over a set somewhere else and he could see what the state of the back from that vantage point. You know, what are the you know, what what are the beams or columns that are obstructing the view? And you could see that right from the seats. So it's really fascinating and great use of VR technology. What advancements are you seeing in regards to the metaverse? Metaverse is really cool because so like in construction, you know, software has a place, right? We design it and then it goes off to construction and you can use it to refer back to the original design and things like that. But Metaverse is all design, right? It's all software.
And so it gives you this, you know, this is our world now, right? Our software, you know, is used to design things and then you explore that world, you know, in the metaverse. And so really, this is a great opportunity for us. There is no construction site. It's just software, just creating. And so it gives you a lot of flexibility for people to to explore and create these worlds that you couldn't otherwise.
You know, like we went to the like, you know, like you think about like in L.A., I like cars and the Petersen car museums are really cool. And but most of the cars are down, like, hidden away in, like, a garage that you don't really go see. Right. Wouldn't it be cool to be have this this infinite sized showroom where you could highlight, you know, different, you know, different cars. So instead of having a finite look spot that you could showcase cars in their museum, you can have almost an infinite space to showcase, you know, things.
So the metaverse is really pretty exciting and it really hits the target market for for design. Are there any particularly exciting themes that you've seen emerging in this area? You know, modular, prefabricated construction, I mean, this is really, you know, evolving and accelerating. You know, if you have to build on site, you know, you have to take a whole crew and move them somewhere or put them on site for a period of time. And it can take a long time, especially, you know, in remote areas.
It's really difficult. And so to be able to build it, you know, in a kind of a factory setting and then assemble it on site within a period of a day or two. That's that's changing the industry with all these innovations. What impact have you seen on the construction industry in particular? You see lots of these point solutions getting creative.
And so it doesn't prove that particular need. Right. But we also see, you know, construction productivity over the last 20 years hasn't really improved according to like Deloitte.
They did a study and they kind of showed, you know, what's going on, you know, productivity wise, you know, construction versus like general machinery and then also like automotive. And what you see is, is companies, you know, that are doing like automotive, you know, per person, they're 60% more productive today than they were 20 years ago. But in construction, it really is still pretty flat.
Now, it's not just because of software, but but it it kind of calls out that basically we're not getting more efficient in construction area. Right. We're pretty flat. And all these point solutions are improving little, you know, steps of the process. We're not seeing the big dramatic gains like we see like in automotive and other industries. Why do you think that is that this new technology isn't being implemented as expected.
You do see companies are investing in improving their design processes. You know, they really are trying to leverage this new capabilities in. Sometimes it's pushed by, you know, government regulations, like governments will say you need to have a 3D model to represent this project or this building or whatever. And so they are adapting it by adopting it because, you know, they're required to. And so but we still see the old same processes are still there as well.
So it's like, yes, you need a 3D model, but I also want to have 2D drawings as well. And the 2D drawing is the master. So so they are kind of realizing some steps, you know, small elements of improvement, but not big gains like you'd expect. Right. And it's and it's a little a little bit mystifying because they it's not like they're not spending money on software because the AC design software business has been growing like at a very high pace. Right.
So the software is growing at 10 to 15%, but productivity is not increasing by 10 to 15%. And so there's a mismatch like it seems like, yes, we're providing solutions here, but the solutions aren't having a big impact. They're having small impacts.
You said there was a bit of an improvement in AEC productivity, but not nearly as much as other industries. Why do you think that might be? So Deloitte estimates that there's a 5% improvement over this time. Right. And in automotive is about 60%.
So there's a dramatic difference there. CEOs are starting to kind of scratch their head and say, well, why is there such a large discrepancy? What can we learn from these other industries? What can I learn from automotive or what can I learn from machinery? You know, how do they do things? Is that something we can adopt? And is it so different that we can't leverage some of their best practices and design manufacturing techniques in construction? And so it's a tricky question. And so they're still struggling, trying to figure out, you know, why are we getting better productivity? Are their best practices that are used in other industries that could also be leveraged in the engineering and construction industry? Some things are unique, right, with with AC. Right.
There's a lot of, you know, local regulations, you know, So you've got you know, you've got local, you've got state, you've got government, you know, federal government type regulations for for construction. And so some of those things, you know, it takes time to do inspections for all the different disciplines. So that that is an impact. Right. And that doesn't go decrease over time. You know, it's always more. Right. So that's impacting some of the productivity because you need to have these checks and balances as part of AC.
So it's not just on the software side. There's also challenges in the labor market, right? We've seen that for every two people that retire from the labor market, we're only getting replaced by one. And so they're struggling. They're saying, I need to be more productive, Right? I have to get to this level where I can do twice as much with one person, because that's what I've got available to me now.
Right. But in addition to that, there are so many opportunities for us to improve the design process, you know, in the digital space as well. With the lack of adoption and implementation so far.
Where do you see space for these improvements to really be made? You know, there's this funny article like I've seen it on like Huffington Post and I've seen it on Pinterest and things like that. It's a RadioShack ad from 1991. This page shows like 15 different products that were on sale for Presidents Day, you know, and and you look at all these products and they're individual products.
So they had things like, you know, they'd have a phone, they had an answering machine, they had like a camera, they had a clock. They had an alarm clock. They had headphones. They had, you know, all these different products. Right. And then you look at that now and 13 of the 15, these products are probably on your smartphone right now.
Right. Your phone can certainly make phone calls. It can do voicemails. It could take pictures and videos. It can record your voice. It can play music.
It's a calculator. It tells the time, the weather, you know, it can be used for word processing and playing games. It's like all these things can be done on your phone. And so, you know, over time, things got better, you know? And what's really cool is that a lot of these things are integrated together, right? So I have a you know, I have a contact.
I can look up, you know, Jenn Piper and my contact and I can just say call her immediately. Right. I don't have to, like, write down her number, go over to a different device and then call. Right. If I want to take a picture and store that, you know, it's not like I have to take a picture, scan it and then put it on my computer. You know, all these things integrated together just offers a ton of benefit, right? That they're all integrated together.
And all these point solutions have really become obsolete. It really is pretty incredible how much those capabilities have changed over the last 30 years and the innovations that have been made. What can we specifically learn from the RadioShack example? Today, an ace in the AC software market. There's lots of these innovative capabilities being developed and these companies, like I talked about, the AC software companies are growing really fast by ten 50%. You know who wouldn't be envious of that? And it's a highly profitable, you know, segment of the market. But with all these individual like integrate, like all these integrated individual tools that are disparate don't really work together.
You know, who's left to do all the hard work to integrate all this stuff together? Well, it falls on, you know, the end user, right? He's got to be the one who connects all the dots. Like, I'm going to integrate all these things together. It seems like better, more cohesive integration might just be the key to this problem.
Are you seeing steps being made to actively work towards this? Software vendors are beginning to recognize this weakness, right? Even last year, the Autodesk CEO, he kind of in response to an open letter to to Autodesk saying we're frustrated, you know, from the users. He basically came out and said at the users group, he said Autodesk still has a lot of work to do on the technology that supports its products. The company has scores the different software titles used by different kinds of architects, engineers and designers shared share.
Not all of them share data easily. And so he laid out a five year plan to put this thing together. Do you see that as a reasonable timeline for such a major advancement? As somebody who works in the software segment and who have gone through many acquisitions and integrating the software into core software, it's it's hard work. You know, you have to get the data models lined up and to be able to have this seamless, integrated, you know, ability to kind of work seamlessly between these applications.
Five years is incredibly optimistic, right? It's hard, hard work. Or the other option is you don't really build up tight integration and you have some kind of neutral file that you're sharing behind the scenes, which doesn't really give you a robust way to share data or build, you know, Titanic graces between the product. So it's it's a lot of work to do on their side by the easy company side to kind of pull together and integrate all these things. And we just haven't seen an appetite in most companies to integrate their products. They're happy to have them be point solutions. So if their productivity is so profoundly affected, why do you think there hasn't been bigger pushback from these AEC companies? That was part of that open letter, But it is kind of a quiet, you know, angst going going on with the users that there was an open letter to the to the Autodesk CEO a couple of years ago.
But you also see that like presentations like conference it okay is this large US based architectural engineering firm and Greg solution is he's the director of design and technology and he's his job is constantly value in technology to make sure they have the best processes for HP employees. And he gave this great presentation called Road to Nowhere based on the song, I think by Talking Heads. Right. And he kind of used that as kind of a, you know, his mantra. So he was just talking about like how, you know, you have this integration of products and every single product is kind of like is is a place where he dumped data right into a whole and then the humans are left to kind of pick up the data out of one whole, configure it and dump it into the next tool.
Right. And it's just the process is just moving data from point A to point B, and in there at the heart of the ones, you have to move this data. And his feeling is like, what does the human have to be at the center of this to kind of connect all these different tools? Derek I'm curious, can you tell us a bit about what you've been hearing firsthand from Siemens customers with all these issues identified? It seems like there may be some possible solutions. I noticed that that we had these customers not from our traditional industries like aerospace and automotive and and machinery that we're using, you know, our product for doing things like bridge design or tunnels or railways. And and and it got me curious, like, why? Why are these companies using something that's not like a traditional BIM tool to do BIM work in this building? Information modeling.
Most people see beam as like the pinnacle of, you know, you know, I've got a rich 3D representation of my model with all the information required for the manufacturing and construction embedded into the model. Right. That's the information part of it. And so, you know, if you have that rich set of data, then then you you can start to build this digital twin because you've got all the information on the design side that can be extracted and leveraged throughout like this digital thread through the whole digital twin. And what was the feedback that you got from them? I've met with some of these customers and have been working with them over the years now, for example, like Max Bruegel. They're a 100 year old German construction company, one of the largest construction companies in Germany, at a $2 billion annual revenue company in Germany. And about 10 to 15 years ago, they realized that their designs were becoming really complex and it was really too difficult and error prone to to design and document, you know, and manufacture complex designs using, you know, with the current set of tools.
Right. And so they said, well, what would happen if we, you know, export an integrated set of tools? And so they initially kind of started with, you know, Annex four manufacturing. And then they realized, well, there's a lot of benefits if I have an integrated solution between, you know, the design and the manufacturing whenever I make a change in the design.
The manufacturing just kind of updates, right? And then the same with simulation as well. You know, if I make a change to the model, you know, I don't have to, you know, go reapply all the boundary conditions or loads anymore. I can just update them because I've got an integrated set of tools.
And it just saved them. So much time that they decided that, you know, we're going to go with an X and start using and more and more. And then when it came time for their modular housing or sorry, modular department module, they said, well, you know, we need to integrate like, you know, structure. All we need to do electrical, we need to do piping, we need to do, you know, concrete.
There's all these different disciplines together. You know what? What do we use? Right? And so they decided to to go ahead and use an X and four bit for them. You know, they say, you know, team center and an X is really the ultimate bin solution. So it seems like that concept of collaboration between technologies remains the key to the entire puzzle here.
I just like bought a used home. It was about 20 years old. Everything needed to be replaced. And so I when I did it, I replaced all the appliances and, you know, it was like, well, you know, I'm going to do, you know, high end appliances, like do all this smart appliances.
So I have smart, you know, like a smart oven, a smart fridge, smart washer dryer, smart lock on the front door. I've got a smart doorbell. I've got a smart thermostat. And I'm like, man, you know, this is like, so cool, right? And I even got my son, my teenage son that was like, Dad, it's so cool. We've got a smart house. And so my son was telling me how cool our smart house was.
I think the washer happy stop like cycle was over and it popped up in my TV screen and he's like, Dad, Dad. It just showed up. It told me my washing is done on the TV.
And I'm like, It's so cool. We have a smart house. And my wife, she's always very skeptical. And so she said, how smart is it? She goes, Alexa, turn the thermostat down to 75 degrees.
And then Alexa says, I don't know what you're talking about. I don't know what a house is. And so how smart really was this? And, you know, yes, eventually I could I could build that integration and like I could teach Alexa, you know, how to interoperate with these things. And that's effectively what a lot of our you know, these companies are doing that these days.
These tools don't naturally talk to each other, you know, out of the box. So you kind of have to teach them. And there's a lot of rework and there's customization that needs to occur. And that integration isn't necessarily the simplest thing to do and implement, is it? That's the challenges that you have these great individual solutions and they can kind of talk to each other. But when you roll it all up, do you have that smart, you know, tightly integrated set of products? And that's the challenge that we see. You know, imagine like that's just my house, you know, imagine what like like, you know, a building has to do, right, with like fire sensors and with, you know, you know, the like plumbing for for fire suppression and, you know, things to understand whether doors are open or closed and, you know, all these things that need to be monitored.
Right. And who's going to monitor? How do you pull all this together? I would imagine it's even more complex than on the AEC level. They have these capabilities for electrical, they have capabilities for plumbing, and they have one for FAC and a structural steel. All of these things, they have these individual tools. And then on top of that, you need to analyze how they work together. And then you need to, you know, simulate that.
You know, it's a real difficult and difficult situation, trying to integrate all these tools, get a a good solution. And it feels a little bit like some of the software vendors are a little deaf to this. This challenge right now is only now being highlighted in the last six months that you hear anyone talking about this challenge.
But it's really one of the at the heart of, you know, where this these challenges occur and the, you know, lack of productivity, you know, achieving improve productivity. I think that's really at the heart of why we can't improve productivity. You mentioned briefly before the use of the digital twin. I'd like to know how integrated Multi-Discipline BIM design works with the digital twin.
The BIM is really just the capturing of the data and making sure you have all the data in one location with all the information required to flow downstream. Right. And so the digital twin is really enables the loop back mechanism, right? So I want to make sure that if I find issues right during the construction process, I can build that back into my original design so that future projects will will look for this issue and ensure that we avoid these issues. Right. So the digital twin really enables me to to capture this information and knowledge and embed it so that next time I can learn and be better, more productive. Can you expand a bit on that concept of the digital twin and the loopback mechanism today? Every single project is a bespoke project, right? And it feels like we tend to make the same mistakes over and over again because we're not we're not able to put into our design process the things we learn from from past projects, right? And so that's what the digital twin enables us to do, you know, And in the ECS, it enables us to actually realistically simulate, you know, in the physical world, in the digital space.
So if I needed to if I had a problem right in the physical world, I could go immediately to my digital twin and said, okay, what's impacting that? What's connected to that? And, you know, I can find everything that's, you know, associated with that problem, right? Because it's all tied together with the digital twin in the digital thread. We don't talk a lot about like in the area that you see. But it really is that the ability to to flow this information between all the applications. Right.
And today there's talk about like open beam, like having a standard that basically everybody writes to and so we can all read this. So today, things like neutral file formats like IFC are promoting like openness, right? So if everyone outputs IFC, that's great. And then we can read this information in and a lot of that data is preserved, you know, beam information that's embedded into the geometry, and then you have the geometry as well. But really, you know, what's the level of integration there? Am I going to be able to identify like manufacturing operations were applied to this space here during a change? Am I going to understand how to react to that change? You know, what about labeling of faces and edges to enable, you know, simulation to update automatically when I make a change? So so that digital thread, you know, you want it to be really robust so that when you make a change, it propagates through all the applications. Before we go, I'd like to look forward a bit. Where do you see some of these AEC trends going, say in the next 3 to 5 years? Definitely.
Like we talked about today, you know, integration between disciplines has to improve, right? I think that's a huge inhibitor to, you know, making, you know, great productivity gains. Right. The currently, you know, you hear a lot of vendors talk about like an open standard.
And that's really the easiest thing to do is if I can I don't have to worry about integrating it, I just output something and then somebody else has to move it from one application to the next. So a lot of people are about this open standard, but not really taking accountability of how that's going to work with the next downstream application. Right. And so I think that's what's going to change, is people are not going to be happy having a person at the center of this moving data from here to here and having to do the hard work of integrating and find changes. Right? That's hard work and it's value.
There's no value added there. It's just trying to replicate what I have and this system and this other system. And I have a lot of work to do to to do that. Where do you see an end point for that integration obstacle today? You know, people are still, you know, convinced that this best best in breed tech solution where, you know, I buy an application that's hyper focused on exactly what I want to do. And for somebody that does, like still constructs it are still still structures, you know, that's all I do. It's great.
I just use this and then I throw it over the wall to my general contractor and say, you deal with it now. And so the general contractor has to deal with it. And if there are issues or changes, he has to communicate it back to that person. And so if everybody uses their own tool, it just kind of throws out of the wall that mentality can exist, you know, in the future. There has to be this idea of integration and you see this more, right? You see, like it used to be very, you know, design bid build. That was the, kind of the, the working method in this industry.
And now you see a lot more design and build. So the person who designs it has to also build it. And so there is more collaboration working now, but it's still being done with just like disparate tools, right? And when you try to, you know, do it with disparate tools and you're trying to use some kind of common open tool to, you know, open format to kind of connect these things, you know, the whole process is only as good as your weakest link, right? And so I feel like things will get better little bit by little bit. And then somebody is just going to say, this is not workable, this is not scalable. I need to have a tightly integrated solution. I need a software vendor who's going to, you know, understand this and provide me in an integrated set of tools so, you know, I can accomplish these things and make changes very easily in the impact of these changes are well understood and communicated to all the different downstream applications. Right?
So I think you'll see a lot more people looking to say, okay, I understand we need to look at this holistically, not like discipline by discipline. So, Derek, this is just part one of our conversation. I wonder, can you give our listeners a preview into the next couple of episodes that we'll be covering in the next few weeks? We're going to talk about collaboration between people. Right, today we talk a lot about collaboration of tools, different softwares. But tomorrow I'm going to talk about just the challenges that, you know, people collaborating together and working together in a shared space. Thank you so much to Derek for joining us today on the Next Generation Design podcast.
Stay tuned for episodes two and three of this series. Thanks also to our listeners for joining us today. Join the next time as we discuss more about latest design innovations and software applications. I'm your host, Jennifer Piper, and this has been Next Generation design.
2023-12-09